The attacking ＂stock god＂! Guoxuan Hi-Tech made a profit of 143 million yuan by speculating Cyrus last year, and deducted a non-profit of only 10.6 million yuan in the first quarter of this year.

An outdated former brother, an aggressive new stock god

On the evening of April 19th, Guoxuan Hi-Tech (002074.SZ) disclosed the 2023 annual report and the first quarterly report of 2024 simultaneously.

According to the financial report data, in 2023, Guoxuan Hi-Tech achieved an operating income of 31.605 billion yuan, a year-on-year increase of 37.11%; Realized a net profit of 938 million yuan, a year-on-year increase of 201.28%; Realized a net profit of 116 million yuan, a year-on-year increase of 122.56%.

"The company’s annual product delivery exceeded 40GWh, a year-on-year increase of more than 40%. In the situation of continuous decline in battery prices, sales revenue including tax increased by more than 50% year-on-year, and revenue from overseas business and energy storage business doubled. " Guoxuan Hi-Tech explained the reasons for the increase in performance in its annual report.

From the perspective of business segmentation, power battery system and energy storage battery system are the main pillars of Guoxuan Hi-Tech’s performance. The former accounted for 72.93% of revenue in 2023, while the latter accounted for 21.93%. Compared with 2022, the energy storage battery system only accounts for 15.22% of the revenue in that year, while the power battery system accounts for 80.18%.

Times Weekly reporter noted that the gross profit margin of Guoxuan Hi-Tech energy storage battery system was 18.29%, an increase of 9.78% over the same period of last year; The gross profit margin of power battery system was 15.04%, a decrease of 10.12% compared with the same period of last year.

The demand growth of energy storage industry has promoted the development of energy storage business of Guoxuan Hi-Tech.

According to the preliminary statistics of GGII (High-Tech Industry Research Institute), in 2023, the global energy storage lithium batteries shipped 225GWh, up 50% year-on-year, of which China shipped 206GWh, up 58% year-on-year. According to GGII forecast, the global energy storage battery shipments will approach 700GWH by 2025 and exceed 2TWH by 2030.

Thanks to the high prosperity of the energy storage track, lithium battery companies such as Contemporary Amperex Technology Co., Limited and Yiwei Lithium Energy, which have recently disclosed their performance, have performed well in the energy storage business, which also shows that the energy storage market has not yet been the final leader, and Guoxuan Hi-Tech may have the opportunity to overtake on this track.

Guoxuan Hi-Tech was once the first power battery company to be listed on the A-share market.

Guoxuan Hi-Tech, established in 2006, was listed on the backdoor of Dongyuan Electric in 2015. It was once a veritable "Power Battery Brother" in China. 2006 was the first year of industrialization in Ferrous lithium phosphate, and Guoxuan Hi-Tech production line was officially put into operation in 2007. In 2009, when the tuyere of Ferrous lithium phosphate was opened, Guoxuan Hi-Tech completed the assembly of 30 bus battery modules that year. In 2012, Guoxuan Hi-Tech took the first place in the output value of power batteries and became the leading power battery in China at that time.

However, with the development of new energy vehicles, in 2016, ternary battery overwhelmed Ferrous lithium phosphate, and Contemporary Amperex Technology Co., Limited, who made a big bet on ternary battery, was born, while Guoxuan Hi-Tech, which has been laid out in Ferrous lithium phosphate for many years, was unable to hold the position of "the first brother" and had to surrender.

In terms of performance, in 2017, 2018 and 2019, Guoxuan Hi-Tech deducted non-homecoming net profit for three consecutive years, and fell into a loss in 2019.

According to the financial report data, from 2017 to 2022, Guoxuan Hi-Tech realized net profit of 529 million yuan, 191 million yuan,-345 million yuan,-236 million yuan,-342 million yuan and-515 million yuan respectively. Until 2023, Guoxuan Hi-Tech turned losses into profits after deducting the non-homecoming net profit, and realized a profit of 116 million yuan.

According to the data of China Automobile Power Battery Industry Alliance, in 2023, the installed capacity of the company’s power battery was 15.91GWh, up by 19.35% year-on-year, with a market share of 4.10%. Among them, the installed capacity of Sanyuan power battery is 1.20GWh, accounting for 0.95% of the market, and the installed capacity of Ferrous lithium phosphate power battery is 14.71GWh, accounting for 5.64% of the market.

According to SNE Research data, the global power battery loading capacity of Guoxuan Hi-Tech in 2023 was 17.1GWh, ranking eighth in the world, which is far from the global power battery loading capacity of the seventh Samsung SDI 32.6GWh. In the global market, Guoxuan Hi-Tech has a market share of 2.4% in 2023, which lags behind Samsung SDI(4.6%) and is far from the leading Contemporary Amperex Technology Co., Limited (36.8%).

Although Guoxuan Hi-Tech realized a real turnaround in 2023, the performance in the first quarter of 2024 did not satisfy investors.

According to the first quarterly report in 2024, Guoxuan Hi-Tech achieved an operating income of 7.508 billion yuan, a slight increase of 4.61% year-on-year; Realized a net profit of 69.1379 million yuan, a year-on-year decrease of 8.56%; Realized a net profit of 10,603,400 yuan, a year-on-year increase of 195.26%.

According to the development law of power batteries, the first quarter is usually the off-season of power batteries, and the performance of power battery enterprises basically follows this law. It is worth noting that by the end of 2024, Volkswagen (China) Investment Co., Ltd. (hereinafter referred to as "Volkswagen China") will regain its voting rights.

According to the annual report, Volkswagen China promised that within 36 months after the company’s non-public offering and share transfer are all registered under the name of Volkswagen China, or within a longer period determined by Volkswagen China, Volkswagen China will irrevocably give up the voting rights of some of the company’s shares, so that the voting rights of Volkswagen China will be at least 5% lower than that of the founding shareholders (Nanjing Guoxuan Holding Group Co., Ltd., Li Zhen and Li Chenhe are called the founding shareholders).

The performance of the main business needs to be improved, but Guoxuan Hi-Tech has done a good job in securities investment, achieving an investment income of 108 million yuan during the reporting period.

According to the 2023 annual report, Guoxuan Hi-Tech currently holds 9 stocks. Among them, the newly purchased stocks in 2023 are 30 million yuan of Ernst (301325.SZ), nearly 50 million yuan of Telford Technology (301511.SZ), nearly 49 million yuan of Yifei Laser (688646.SZ), 218 million yuan of TUHU-W (09690.HK) and 107.

Securities investment of Guoxuan Hi-Tech in 2023; Source: 2023 Annual Report

Except for Ernst’s profit of 289,000 yuan, the other new stocks have different degrees of floating losses. It is worth mentioning that among the four stocks originally held by Guoxuan Hi-Tech, only Cyrus brought a profit of 143 million yuan, while Zotye Automobile, Tongguan Copper Foil and Jingke Energy lost 6,706,600 yuan, 9,357,500 yuan and 2,895 yuan respectively.

On April 19th, Guoxuan Hi-Tech closed at 18.55 yuan/share, down 2.16%, with a total market value of 33.117 billion yuan.